Why contractors need different books
Supply-house runs on the business card, subcontractors paid by e-transfer or cheque, deposits that come in before the job starts, a truck that's partly business and receipts that live in the cup holder. That's what makes a contractor's books messy, and it's what a good bookkeeper spends most of the month on.
What a bookkeeper for contractors keeps track of
- Materials as the cost of each job, so you see what's left after them
- Subcontractors paid, for slips at year end
- Customer deposits and progress bills
- Holdbacks customers keep back until the job is done
- Your truck, tools and equipment
- Sales tax or GST/HST on what you bill
In the US
- Subcontractors you pay $2,000 or more in 2026 need a 1099-NEC by January 31, so collect a W-9 before you pay them.
- In many states contractors pay sales tax on materials when they buy them instead of charging it on the job. The rules vary by state and by the kind of job.
- Tools and equipment can usually be written off in the year you buy them, or over several years.
In Canada
- If most of your income is construction, you report subcontractors you pay $500 or more on T5018 slips, by six months after your year end.
- GST/HST goes on your invoices for labour and materials once you're registered.
- Holdbacks are usually 10% under provincial construction laws, released after the job is finished.
What SumSwift does for contractors and trades
- Materials sorted as the cost of the job, with job costing to see what each job made
- Subcontractor lists for 1099s or T4A and T5018 slips, with who you still need a W-9 or business number from
- Progress bills and holdbacks tracked until they're released
- Cheques written and printed in SumSwift, and "CHEQUE 104" on a statement asked about once
- Big purchases get one question, "Is this equipment?", so they're written off over the right years
- A mileage log (a CRA logbook in Canada) and the business share of your vehicle worked out for taxes
- Receipts snapped with your phone or forwarded by email are read and matched to the charge